Crowe UK: 2024 Manufacturing Outlook Report Explores Growth

Crowe UK, a leading audit, risk and tax advisory firm has partnered with the Confederation of British Metalforming (CBM) to survey the key issues impacting manufacturers. 

The results highlight the impact of political pressures, potential barriers to growth and the positive outcomes of decarbonisation on the manufacturing sector, which shows overwhelming dissatisfaction with governmental involvement. 87% of manufacturers reported feeling unhappy with the government’s support for the sector, a sentiment that is further contextualised in the report’s exploration of barriers to manufacturing growth.

The growth problem facing supply chain manufacturing

Of the potential growth barriers, investment demands and willingness to invest were the biggest considerations for respondents, who expressed reluctance to borrow and invest. This is supported by the survey’s findings, which found that the most prominent means of business funding this year was own cash resources. This correlates with the limited short-term demand for capital investment finance currently seen in the market. 

Crowe cites government investment as the much-needed solution to these barriers. The firm argues reshoring and nearshoring need to be back on the agenda, with close attention paid to raw materials, expertise and necessary funding for the venture to succeed. To demonstrate the potential effectiveness of this they highlight the UK's efficiency at recycling steel scrap, of which only 25% is processed and retained for supply while the rest is exported. The survey concludes that greater control of supply chains and focus on local sources is necessary for the growth of UK manufacturing. 

“Large numbers have been thrown around by politicians in terms of support for manufacturers, but the proof will be whether this is actually spent on what the sector needs, as evidenced in this report.” Jonathan Dudley, Partner and Head of Manufacturing at Crowe said.” I’d like to see greater support for UK businesses and a reduction of regulatory barriers for manufacturers in recognition of the vital role they play in the UK economy. The UK has a rich history in manufacturing. For this to continue, it is high time that a dedicated Minister for Manufacturing was established to unlock the sector’s potential and allow the UK to revive its position as a global manufacturing hub.”

Manufacturing’s future: decarbonisation and digitisation

Looking to the rest of 2024 and beyond, the report found a reduction in concerns surrounding energy costs, likely the result of prices falling late last year. This reduction in concerns is also linked to 70% of the survey’s respondents investing in carbon-neutral initiatives. Now only 5% of respondents cite energy costs as a worry, in an era where UK industries are increasingly embracing renewable energy production and decarbonisation. Crowe’s survey strongly suggested this reduction in energy concerns was only possible due to government funding for new manufacturing, aerospace and automotive technologies. It concluded that the strategic allocation of this investment into UK manufacturing is paramount.

The survey also echoes an existing consensus on digitisation being the way forward for the manufacturing industry, with 20% of respondents agreeing that traditional manufacturing methods will be replaced by new technology. Stephen Morley, CBM President, had this to say on the challenges of 2024: “Manufacturing should be a priority for this UK government and the next. The challenges of 2024 present a great opportunity for the sector, with the UK government prioritising economic growth to pay the bills.” He seconded Dudley’s suggestion that an official governmental position was needed to manage the manufacturing sectors' needs. “We need significant investment and government support, focussing on an Industrial Strategy including a Minister for Manufacturing.” 

As over half the world’s population votes for future governments later this year, this survey directs the manufacturing sector’s attention towards areas that need policy support and intervention to flourish. 

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